subject: Foreclosures Have Leveled Off In Some Regions [print this page] Foreclosures Have Leveled off in Some Regions
The American economy is going through one of its challenging phases. Unemployment is at its peak and people are faltering on mortgage payments. As a result, foreclosures are at an all-time high. However, there is a spot of good news amidst all this gloom. The real estate market has stabilized in the three states of Florida, Arizona and California, where it has been hit the hardest. This shows that the crisis in the housing market may be over soon. This has been pointed out in a report by the Associated Press monthly analysis report. The study on economic stress was conducted in more than 3,000 US counties.
The AP Economic Stress Index shows that bankruptcy and foreclosure rates are steady in a few states. Yet the increase in unemployment is hampering recovery in a few areas. This is especially true in industrial Midwest and Southeast. A score of 1 to 100 is given to each county based on its unemployment rates, bankruptcy and foreclosure rates. A higher score translates to greater economic stress. The stress score of an average county increased to 10.6 in June. In may the figure was 10. Economists attribute this mainly to rising joblessness.
Last year, the Stress score of an average county was 6.7. The score was lower because the economy was in the expansion mode even then. In fact, economic growth was on till the second half of 2008.
Roughly, when a countys score exceeds 11, then it is considered to be stressed. Three months ago, at least 41 per cent of the counties notched up a score of 11. Compared to April and May figures, this was 34 per cent and 26 per cent higher respectively.
Meanwhile, the economy shrank at the rate of 1 per cent in the second half of 2009. Naturally economists are optimistic that the economy is perhaps recovering. Foreclosure rates are quite steady in Florida, California and Arizona. Jim Diffley, a regional economist at IHS Global Insight, says the decrease in foreclosures is indeed good news for the economy. True, they have leveled out in some regions, but in others, they are there at higher levels. It is time to sit up and take notice of that, says Diffley. Other figures also suggest that the housing market is at last recovering. Home resale has picked up in many places. The low home prices have made the market very attractive for first time buyers.
